Nasdaq expands Primex eligible securities
Our Markets Bureau
15 July 2002
New York: The Nasdaq Stock Market (www.nasdaq.com) has announced that beginning 15 July 2002, the Primex Auction System will expand trading to include all New York Stock Exchange-listed securities. This will more than double the number of stocks eligible to trade in the world's first totally electronic auction for stocks.
Since its launch in December 2001, Primex has executed more than 900 million shares. “We have experienced continued and steady growth in usage,“ says Nasdaq Transaction Services executive vice-president Dean Furbush. “Primex recently set a record for daily trading volume of more than 13 million shares.“
In conjunction with expanding the list of eligible securities, Nasdaq will upgrade the capacity of Primex to process 1,000 messages per second. “This system enhancement will further assure participants that they can expect sub-second execution times in Primex, even at peak volumes,“ says Furbush.
Primex was engineered to provide Nasdaq market participants with a centralised, market-driven price improvement and liquidity facility. All Nasdaq participants that subscribe to Primex have an opportunity to access orders flowing though the system, which will provide many of these orders with exposure to a wider marketplace. All executions in the system occur at prices within the National Best Bid and Offer (NBBO).
Primex will be linked to SuperMontage, Nasdaq's new trading platform to be introduced later this month. Any Nasdaq participant can use Primex in tandem with SuperMontage to seek seamless price improvement opportunities for their marketable orders, while still getting the full benefit of SuperMontage.
In general, Nasdaq charges no fee to firms that enter orders seeking price improvement within Primex. Market making firms that expose their customer orders in Primex have the ability to commit their own capital to those orders, thus instantly guaranteeing an execution within the NBBO.
More than 2,000 securities will be added to Primex's list of eligible securities, which already numbers more than 1,400 securities. Included are all components of the Standard & Poor's 500 Index and the Dow Jones Industrial Average, the top 1,000 Nasdaq securities based on market capitalization, and three popular Exchange Traded Funds.